The Midland Basin is an oil rich basin with vertical wells that have been producing for over 50 years. Recently, operators have accessed new geological pay zones through horizontal drilling and fracturing, and these zones have produced beyond what geologists thought possible only a few years ago.
The East Texas Basin also has multiple geological pay zones, including the liquids-rich gas produced by vertical wells from the Cotton Valley formation, as well as horizontal wells that produce from the Haynesville’ Shale.
In the current depressed commodity price climate, much of the development has slowed down or stopped across the board, including in the Permian Basin and East Texas. We believe this is an advantageous time to acquire valuable assets at a discounted price. While buying distressed assets may yield moderate returns, we believe that when the commodity prices for both oil and gas rebound, drilling activity and returns will steadily increase.